Jul 17, 2013

Confusing New Attorney Fee Instructions

Social Security has issued new instructions on fees for attorneys and others representing Social Security claimants. The instructions have to do with fee agreement cases where the claimant appoints two or more people to represent him or her and then one or more of the attorneys or representatives withdraws. It would be an understatement to say the instructions are confusing. Take a look at these examples given in the instructions and see if you can tell me what the underlying theory is:

Example 2: The
claimant appointed two representatives from Firm A, one representative
from Firm B, and one representative who is a sole practitioner. The
representative from Firm B waived his or her fee from any source. The
sole practitioner waived charging and collecting a fee from the claimant
or any auxiliary beneficiaries because a third party entity will be
paying his or her fee. The two representatives from Firm A have an
approved fee agreement that each of them signed, and SSA determines a
fee of $6000. The representatives from Firm A will receive $3000 each.Example 3: The
claimant appointed two representatives from Firm A and one
representative from Firm B. One of the representatives from Firm A
signed a fee agreement. The second representative from Firm A and the
representative from Firm B both waived charging and collecting a fee
from any source. At the time of a favorable decision, the decision
maker approved the fee agreement; subsequently, SSA determines a fee of
$6000. The Firm A representative who had an approved fee agreement will
receive $3000, but the “waived share” of $3000 for the second
representative from Firm A should go to the claimant.

20 comments:

yes, it's actually simple. just explaining how the total fee should be allocated among attorneys. Basically, just because one attorney waives a fee doesn't mean that the others get the entire fee.

In short, if more than one attorney from a firm represents a claimant, they should NOT waive their fee. SSA construes that as the attorney acting pro bono and the attorney that did not waive the fee will only be able to collect the portion of the fee that relates to their "percent" representation, as determined by the number of reps.

I will never understand why SS does not allow a claimant to hire a "firm" instead of requiring an individual attorney on the 1696 and fee agreement. Because we often transfer cases between the individual attorneys in our firm, we (and Social Security) wastes an enormous amount of time and resources with new 1696 and fee agreements because the file moved 20 feet from one attorney's desk to another.

The policy would appear to be to reduce the fees paid to attorneys. What else would explain why portions of the money withheld for the attorney fee should be returned to the client when the other former attorneys have withdrawn entirely and the attorney being paid has done the work?

Let's make it even simpler. The individual ended up hiring two or more attorneys to represent him. His claim is awarded. He is paid all his retro and current benefits and the attorneys contact him to collect any funds they can, just like his landlord collects past due rent, his family collects any loans made, credit card companies collect past payments due, etc. Yes, everyone stands in line because all are equal in getting paid. Or, are some more equal than others?

SSA was idiotic to assume the role of collection agency for claimant's reps and should just pay all past-due benefits to beneficiaries and let them deal with paying their reps. It would relieve SSA of an unnecessary burden and allow them to redirect staff to activities actually related to SSA's mission. Also, it might make the reps work a little harder, since a beneficiary is going to be reluctant to hand over $3000, $4000, or $6000 to a representative who did little on the case.

This is what you all have been asking for and now you are complaining!! The prior rule was that you divided the fee (say $6000) by the total number of appointed representatives - no matter what firm - and then sent the share for any that waived their fees to the claimant. Everyone kept saying no one would take a case where there was a prior representative because even if they waived a fee, the fee for the new reps would never be able to reach the $6000 amount. In example 2, there were a total of 4 reps so each would have a share of $1500. Since 2 of them waived their portion of the fees, the claimant gets $3000 and each rep from Firm A would get $1500 - and not the $3000 that is now payable. In example 3, there are 3reps so they get $2000 each - with the claimant getting the $4000 from the waived fee and the one rep that didn't waive getting $2000. Under this new set of instructions, they aren't letting reps within a firm try to reassign their right to a fee to other reps within the firm. Under the new instructions, the one left charging a fee gets 50% more than he did under the prior instructions.

So, 10:56 - it is the claimant being penalized and not the reps. After all - if you waive your right to charge and collect a fee for your services, it is only logical to conclude that the claimant should benefit from that and not another rep.

And 10:06 - if you want a firm to be appointed, help SSA define a firm. Does it have to be a LLC or what other form - does a partnership count? Could they still accept sole practitioners? What happens when the firm is dissolved - or merges with another firm? Who gets sanctioned if one member of that firm does something that would call for sanctions or disqualification? Does this apply to every member of the firm? And if the firm fires the errant rep, how does SSA handle that since s/he wasn't appointed as an individual? Lots of issues to be resolved but we never see anything from this supposedly competent group about just how to actually "recognize firms." Easy to say over and over but much harder to try and implement.

And all of you - it is my understanding that SSA would give a lot to get out of the fee business. However, that takes changes to the Social Security Act. If you all want to charge and collect whatever you want directly from claimants, then help SSA convince Congress that section 206 is no longer needed!

but then what about the poor and deserving non-attorney reps? How will they afford to (officially not, despite doing things such as preserving legal rights on appeal, interpreting statutes and regs, and challenging the use of/cross-examining expert witnesses) practice law anymore??

There are so many situations where individual reps would have to be considered (e.g., attorney leaves firm) that a rule giving representation to a firm would be swallowed by the individual-minded exceptions (or, at least, so complicated by them to render the system an individual-based one).

How's about your firm gives its clients some continuinty and maybe don't change reps every two weeks before the hearing? Could you try that?

I'm looking more at the non-attorney based rep outfits, but this applies to many firms of all stripes...

@9:44 PM. There would be a huge decline in represented claimant's as there would not be enough assurance that representatives would be paid. The most vulnerable in our society would be without adequate representation on issues critical to their existence.

If SSA issued the checks payable to the claimant and the rep and sent them to the reps office, like settlements in civil litigation, this would provide the necessary structure for the system to work.

Are folks suggesting that the $88 SSA charges me to send me a check is not sufficient enough to cover the cost of the processing of my fee? I find that hard to believe. At best there is no more than 1 hour of total worker time in processing it. If you hire a 35k a year employee to do it, and factor in benefits and overhead costs for facilities and systems, SSA is still coming out ahead in the deal. I really don't see SSA giving us a potential profit generator at this time. And if SSA isn't turning a profit processing fees they should turn it over to an outside contractor who could certainly make a profit at it.

Petition congress to hire people to process just the attorney rep workload and see how that works out for you. I agree in theory that it doesn't take a degree to process the rep fee but its woven into the claim and therefore would be further delayed if you separated it. I hate spending any of my time processing the ridiculous amount of rep paperwork that gets submitted daily, but that's how it goes.

Overpaid, that's a common argument that simply isn't true. Honestly, how do you think service would be if you paid a CR less, say $25k? That's what, about $12/hr? If you honestly think things would be better, then I need you to stop in and see me. I'll be happy to take your claim for disability.

Anon 2:27 An outside contractor would have to have access to the electronic file (including the payment programs of MCS and MSSICS) which contain every single piece of Personally Identifiable Information about the recipient OR SSA would have to come up with some new program that would not only work properly all the time but that would include plenty of safeguards to keep contractors out of the MCS and MSSICS files.

It is always interesting to read suggestions from people who don't have the basic understanding of the systems that SSA uses and point out how easy it would be to change them, especially when the change benefits that suggestor. SSA is not going to hand all that PII off to non-government employees.